Despite the dip after the Brexit news, cable is set for a stellar month performance
This comes also after cable touched a high of 1.4345 earlier in the month, some 200 pips higher from where we are trading now.
While a lot of it has to do with dollar weakness, sterling itself has been quietly the star performer in the major currency bloc to start 2018. It's the best performing major currency, followed by the swissie.
Major currencies performance against the US dollar this month
Markets haven't really been focusing on Brexit issues and the potential implications just yet, as there is still so much uncertainty at play (take today's drop as an example), but yet sterling has been resilient through all that.
It could be that the initial Brexit trade was overplayed, and that the market is correcting now - but to what degree that is, is one that nobody can really put a finger on. We trade what's in front of us and what we see, and that is that - sterling is moving on despite all those worries with Brexit, consumer data, growth, inflation-wages causing a squeeze on disposable income, etc.
Anyway, the higher British pound is surely welcomed by the BOE as they struggle to keep a lid on inflation recently - and that will allow them more flexibility with regards to monetary policy.
Time will tell if all the worries I highlighted above will come back to bite the sterling, but for now the market just doesn't seem to care all too much.
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